D-backs see D-bucks

When the Diamondbacks take the field in their home opener Monday, Ron Ostlund will savor his $1 million view beyond the right-field fence.

That's the amount the Riviera Pools owner will pay during five years to make a splash with his company's name and logo at the stadium's pool.

The sponsorship is among the Diamondbacks' most prized off-season signings, and it's the type of lucrative deal the team hopes to duplicate in coming months to bolster revenue and offset some smaller corporate deals it has lost in the past two years.

Corporate sponsorships are an important source of revenue for professional baseball teams like the Arizona Diamondbacks. The amount of money a team collects through such deals is a key factor in helping to pay for talented ballplayers who keep a team competitive.

"The goal is to continue to grow revenue to a break-even position and continue to put a consistently high-performing team on the field," said Tom Garfinkel, the team's chief operating officer.

Still, the sponsorship deals pose a challenge for the Diamondbacks because some of the franchise's original deals are up for renewal. Add in a slumping economy and a competitive sponsorship market with the Suns, Cardinals, Coyotes and other professional sports events vying for corporate cash, and the Diamondbacks brass says the team must work to show companies that such deals offer a return on their investments.

Overall, the Diamondbacks collected total revenue of about $157 million in 2007, and the team projects an 8 percent increase this year. About 15 percent of total revenue comes from sponsorships with local and national corporations.

Other major sources of revenue include ticket sales, radio and television contracts and revenue sharing from wealthier franchises in larger markets such as the Boston Red Sox and Los Angeles Dodgers.

The team counts 65 sponsors to open the 2008 season, down from 106 in 2006.

Despite the drop, the Diamondbacks are collecting more money from existing sponsors. Sponsorship revenue has jumped 34 percent during the past two years.

Team representatives attribute the jump to less clutter in the ballpark, making existing spots more valuable.

In 2006, corporate sponsors took 90 percent of the stadium's advertising space but paid 58 percent of the team's asking price. This year, the team sold 60 percent of available space at 98 percent of the asking price.

The Diamondbacks stress to corporations that its sponsorship deals now have "price integrity" that ensures sponsors pay similar amounts for comparable signage. That wasn't always the case.

"Before, it was more about let's bring in more deals and more dollars," said Cullen Maxey, senior vice president of corporate partnerships and marketing.

In addition to scaling back total ad space, the team pitches co-marketing deals so sponsors can get more bang for their buck.

That is the pitch the D-Backs brass is dealing across corporate Arizona: Sponsorship can help sell your product or service to Diamondbacks fans.

One example is a deal hatched with Fry's Foods that rewards fans who spend more at those stores. The grocer reported increased sales among Diamondbacks fans enrolled in the program.

The Arizona Republic was among the team's original crop of sponsors that helped bring professional baseball to Phoenix. During the past 10 seasons, the newspaper's logo was displayed prominently above the stadium's scoreboard.

The newspaper remains a sponsor, but its logo will no longer be above the scoreboard. The Diamondbacks will unveil an enormous high-definition scoreboard with the Chase Field logo. The scoreboard will flicker with corporate messages at select times during games.

Maxey said that the new scoreboard gives sponsors the flexibility to change messages more frequently.

John Zidich, president and publisher of The Arizona Republic, said that the company now looks to sponsorships with the Diamondbacks and other community organizations as a way to promote its different brands such as azcentral.com, CareerBuilder or apartments.com.

"We find them to be an extremely valuable partner," Zidich said.

Changing times for sponsors

Experts say revenue from national sponsors such as beer or soft-drink companies remains constant. The real test for baseball teams is how well they secure deals with local businesses, such as home builders, banks or financial-services companies.

"The local industry is where you are going to see (challenges) if the contracts are up," said Mark Ganis, president of Chicago-based Sportscorp Ltd.

Ganis singled out sponsors tied to the real-estate industry as one area where sponsorship may suffer.

"The market has come down so dramatically in certain areas," he said, it has had an impact on teams.

Diamondbacks officials acknowledged that the sluggish economy has been challenging.

"We've felt it. There's no doubt about it," Maxey said. "The reaction to an economic downturn tends to decrease marketing dollars a bit."

Still, Maxey said, the Diamondbacks have stressed a long-term outlook to sponsors.

"Sports tend to survive in tough economic times," he said. "The model we are building here is sustainable."

High-profile locations

Ostlund, of Riviera Pools, admits he has no idea whether his sponsorship will help him sell more pools.

He doesn't have any hard facts or figures to indicate if his $1 million investment will pay off.

"It was more a gut feeling than anything else," Ostlund said.

The high-profile location of the stadium's pool factored in his decision to sponsor the team, though. As a kid, he would take a 100-mile-plus bus ride from the central California town of Turlock to watch the San Francisco Giants play at Candlestick Park.

Ostlund also is a savvy businessman who has used unconventional marketing to climb the rankings among pool builders in Arizona.

He has funded a series of television commercials calling attention to what he calls a "kickback scheme" between home builders and pool companies that results in big bills for home buyers. Home builders deny such allegations.

Ostlund said his company built 630 pools last year and is on pace to build more than 900 pools this year. Many of those sales came from new-home customers who purchased from Riviera instead of the home builder's pool company.

While he has no plans to halt the kickback-themed commercials, Ostlund said he expects the D-Backs sponsorship to help reach even more potential clients.

"The best part of this is the credibility it gives you," Ostlund said. "It's just amazing how many people I know who are die-hard Diamondbacks fans. It gives us credibility that will help us sell pools."

Chase Field in Phoenix, the home of the Arizona Diamondbacks, offers space to sponsors throughout the facility, including above the field. The team counts 65 sponsors to open the 2008 season, down from 106 in 2006.

More on this topic

By the numbersThe Arizona Diamondbacks have retained 20 of the franchise's 57 original sponsors. Of those 20, four have reduced their sponsorship contribution while 10 sponsors have increased it.Sponsors:
• 106 in 2006.
• 87 in 2007.
• 65 in 2008.Revenue increase: • 13 percent in 2007.
• 21 percent projected in 2008.
Sources: Diamondbacks, Republic research.